Aperam CEO: Diversification Lowers Dependence on Europe, Maintains EBITDA Growth
Aperam's Strategic Shift and Financial Performance
By Javi West Larrañaga
July 30 (Reuters) - Luxembourg-based steelmaker Aperam no longer depends on Europe for most of its earnings after years of diversification, although it still stands to benefit from the region's steel recovery, Chief Executive Sud Sivaji told Reuters on Thursday.
Diversification Beyond Europe
"When Europe was suffering, we did not sit still. We diversified and transformed into this high-value materials company," Sivaji said, referring to the group's Brazilian, North American and distribution businesses, among others.
Until 2020-2021, Europe accounted for around 60%-70% of Aperam's EBITDA, he said.
"Now, if you took out Europe, we'd still make 60%-70% of our EBITDA," Sivaji said.
Impact of European Market Conditions
Despite that shift, Aperam expects to benefit from improving conditions in Europe, where tighter import restrictions and the gradual rollout of the EU's carbon border levy have helped lift stainless-steel prices.
Market Share Opportunities
Sivaji expects stainless-steel imports to fall to 17%-18% of the market from 22%-23% currently, creating market-share opportunities for European stainless-steel producers.
Financial Results and Market Reaction
Aperam reported adjusted second-quarter EBITDA of €130 million on Thursday, slightly ahead of analysts' expectations of €127.3 million in an LSEG poll.
Its shares nevertheless fell after the company forecast lower third-quarter earnings because of the seasonal summer slowdown.
CEO's Perspective on Market Sentiment
"The market doesn't want to accept seasonality in Europe," Sivaji said. "I remain confident that during the day and over the next days when they understand it's seasonality, this should be okay."
Shares, which were down as much as 9.1% in early trading, pared losses to trade about 1% lower by 1327 GMT.
Reporting Credits
(Reporting by Javi West Larrañaga in Gdansk, editing by Matt Scuffham)